More New Zealanders applied for mortgages over the summer than at any time in seven years with Generation Y leading the way, credit bureau Veda says.
Mortgage applications during December, January and February were the highest than at any time since 2005, says Veda. The firm says its data from credit reports done for lenders shows a 23.05% rise in applications for the three months compared with last summer.
In February applications rose 29.11% versus February 2011. Generation Y led the increase in applicants, up 36.55%, although Veda said this was off a low base. Applications from Generation X rose 34.58% in February with Baby Boomer applications up 22.04%.
“We know the Auckland property market is heating up and the rest of the country will follow - but these statistics tell us what is coming down the track - there is a lot more heat in the property market and interest is well above pre-Global Financial Crisis levels,” Veda managing director John Roberts said.
“A home is still king for Kiwis and we can see this in the Veda statistics. New Zealanders will still borrow to get into a home."
Veda's comments come with weekly Reserve Bank mortgage approval data having been strong - compared with the last three or four years - over summer. Home loan approvals topped NZ$1 billion in value for three straight weeks in December, according to the Reserve Bank, the first time this had happened since December 2007.
Meanwhile, the banks' General Disclosure Statements show ASB, BNZ and Westpac have been increasing home loans with loan-to-valuation (LVR) ratios of more than 90%. ANZ New Zealand CEO David Hisco hit out at this last week questioning whether lending people 95% of a house purchase price was the right thing to do or a good use of bank funds. ANZ's home loans with LVR ratios above 90% have been falling although its loans with LVRs between 80% and 90% have been rising.
Barfoot & Thompson, Auckland's biggest real estate agent, yesterday said it sold more houses - 764 - in February than in any February since 2007 with the average price up 2.7% to NZ$536,069.
Meanwhile, Roberts said New Zealanders were being more cautious in terms of other borrowing tools such as hire purchase and personal loans, with applications for credit cards up only slightly.
“A home is still king for Kiwis and we can see this in the Veda statistics. New Zealanders will still borrow to get into a home - but they are exercising caution in terms of other borrowing tools," Roberts said.
See Veda's data below:
Mortgage inquiries: Age bands for three months December, January and February
|
Year |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
|
BB |
-8.31% |
-10.56% |
-10.77% |
-14.15% |
61.93% |
0.00% |
16.56% |
|
Gen X |
-13.83% |
-12.46% |
-19.09% |
-22.24% |
58.12% |
1.04% |
27.22% |
|
Gen Y |
3.99% |
4.07% |
-15.90% |
-36.48% |
47.09% |
-3.05% |
34.75% |
|
Total |
-9.94% |
-10.51% |
-14.87% |
-19.29% |
60.45% |
0.07% |
23.05% |
Mortgage inquiries: Age bands for the month of February, year on year comparison
|
Year |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
|
BB |
-4.57% |
-16.08% |
-10.51% |
-6.13% |
49.74% |
1.02% |
22.04% |
|
Gen X |
-12.19% |
-15.63% |
-19.42% |
-14.38% |
47.05% |
1.56% |
34.58% |
|
Gen Y |
7.39% |
-7.15% |
-17.15% |
-26.50% |
32.04% |
7.42% |
36.55% |
|
Total |
-7.46% |
-15.36% |
-14.92% |
-10.73% |
48.27% |
1.26% |
29.11% |
7 Comments
I'm one of those who have recently applied for a mortgage but I ain't buying if I see a boom and resultant upswing in prices. Where I live the market is so dead that some real estate agents blatantly lie about the presence of other bidders to try to get an increase in offer price. Big disconnect between buyers and sellers.
Ha, I've given up on NZ property. It's just a joke - a property down the road from us in West Auckland has just gone up for sale and it caught my eye. A nice little single level brick and tile 3 bedroom house on just over 400 square metres. Nicely renovated, some nice outdoor living with a deck and small but landscaped garden. A single garage with internal access.
Hmmm, I thought. A house that isn't a mouldy old crap-hole. That's unusual. Might be worth $400K perhaps, even though it's a bit small. Then I saw the photos on TradeMe - the interior is nice, it's been properly renovated. Ok, I think to myself, maybe it'd be worth $420 - perhaps even $450K at a push.
So we phone the real estate agent and they're only accepting offers above $550K.
Madness.
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